Monday, September 29, 2003


Crime at Penn

I've never felt concerned for my safety here, but looking at recent crime statistics around Penn is somewhat alarming. I walk by half of these locations on a daily basis.

posted by Ryan : 8:56 PM | permalink

Shoddy customer service in health care

I have long maintained that health care providers give the poorest customer service known to man. Shoshana Zuboff, a Harvard professor, confirms this with an interesting nugget of research: 96% of consumers don't trust their HMO. The health care industry's inability to meet its customers needs seems to present a lucrative opportunity. But how it would be implemented is beyond me.

posted by Ryan : 7:02 PM | permalink

Trading Up

Tonight I listened to a BCG lecture, attended (presumably) by a room of consulting hopefuls. The speaker, Michael Silverstein is the head of BCG's Consumer Practice. He shared insights from his forthcoming book Trading Up, which coincidentally has the same name as Candace Bushnell's (creator of "Sex and the City") new book.

Just by way of observation, this guy is 100% consultant. Smooth, polished, well spoken, and engaging. As well he should be. He's been at BCG since 1980. Just for context, I was in kindergarten in 1980. But I digress.

The central idea of Trading Up seems to be that companies should pay closer attention to the success of high-end products (Mercedes, BMW, Rolex, Callaway Golf Clubs, pricey restaurants, and so forth). From a simple macroeconomic perspective, people (especially in the upper 2/5 of the income quintiles) have higher real incomes than ever before, have deeper interests, and are increasingly willing to pay more for "the best" in certain categories.

He explained that the single biggest contributor to real income growth over the past 30 years has been women's increasing participation in the workforce. The average family has experienced a 62% increase in real income since 1970. But, even more interesting, families with only one wage earner experienced NO real income growth from 1970 to the present. This is somewhat disheartening, as my wife and I plan to have an old-fasioned family with -- brace yourselves! -- a full time mom in the home. Perhaps that BMW 330ci was a pipe dream after all.

Silverstein made an interesting point about "trading down", illustrated by the Costco example: go to Costco and look at the cars in the parking lot. Dodges, fords, Mercedes, Beemers... it runs the full gamut. It doesn't matter how expensive your car is, you still love a good deal. While the middle market "trades up" with certain types of purchases, they are also trading down with the basic items: paper towels, spaghetti sauce, and so forth. The trading down phenomenon increases the income effect further. Personally, I find this to be true. I'll balk at the 75 cent premium that Charmin charges over the Safeway brand (hey, 2-ply is 2-ply). But I won't blink an eye at paying $4 for a pint of Ben & Jerry's.

In the end, his thesis was that the downward sloping demand curve doesn't always hold (in other words, sales don't necessarily go down when you raise the price). In order to defy these economic laws, he claims, the successful, premium-priced product needs to have three types of benefits: 1) Technical, 2) Functional, and 3) Emotional. But that's not all. In order to sustain growth, your product needs continuous innovation. You need to be plugged in to your heaviest customers.

Despite his comments about how his thesis "shatters" the idea of the downward-sloping demand curve, I think it completely agress with classic economic theory. You price a product high when demand for it is inelastic (i.e. where people are not price sensitive). When competitors come in, you sustain your competitive edge through innovation. Your demand curve still slopes down, but you want to find one that is steeper and further out.

The bigger question remains: how can you keep pushing out that demand curve? Sure, innovation is the answer, but it's not a very specific one. Very few organizations have been able to sustain innovation over the long haul. Clayton Christensen's The Innovator's Dillemma presents this paradox nicely.

All in all, the lecture was extremely interesting and thought-provoking. And now I move on to my own personal action plan... where did that pint of Ben & Jerry's go?

posted by Ryan : 6:22 PM | permalink

Wednesday, September 24, 2003


Windows Humor

Just say Cancel to suggested restarts.

posted by Ryan : 7:36 PM | permalink

Friday, September 19, 2003


The perfect happy meal: DVD player, burner, and TiVo

Personally, I think this will be the new killer hardware device: a DVD player/burner with a Personal Video Recorder (i.e. TiVo). As mentioned previously, the functionality of a TiVo needs to be bundled with another more mainstream device. With the widespread adoption of DVD and the growing adoption of digital camcorders, I think this one's a winner. Check it out.

posted by Ryan : 10:08 AM | permalink


Wilco is one of those bands I've always wanted to like but could never really get into. After seeing them in concert, watching them on DVD, and listening to Yankee Hotel Foxtrot over and over, I think I've finally gotten it (Yankee Hotel Foxtrot at least). The album ranges from sad romanticism ("Reservations"), to repetitive ("War on War"), to brilliant melancholy ("Poor Places"), to light hearted rock'n'roll ("Heavy Metal Drummer"), to broken down ("I am Trying to Break Your Heart"). It reminds me of late-era Beatles (a bit of Sgt. Pepper and The White Album) I can see why they had a hard time selling this album to the record labels, but now I love it like an old sweater... it's all about the texture.

posted by Ryan : 9:57 AM | permalink

Thursday, September 18, 2003


A Day in the life

For posterity, here's an increasingly typical "day in the life".

6:58AM - I hear the baby crying on the monitor. "Honey, Christian is crying," I mutter. She feeds him, I fall back asleep.

7:34AM - Alarm goes off. Snooze. Not ready to face the day. Spent 4 hours last night on a Statistics regression project.

7:43AM - Alarm goes off again. Snooze.

7:52AM - Alarm goes off again. Get up. Rush to get ready. No time for breakfast.

8:40AM - Put on headphones, kiss the family goodbye (literally, not metaphorically), and hop on the trolley at 19th & JFK. The trolley is packed, one of the few times I've had to stand.

8:55AM - Arrive at Huntsman Hall just in time for Statistics class. A third of the class is missing... I suppose because we've just hit our first wave of assignments, projects, and quizzes. People were up late last night. During class, something in the lecture tips me off that I've overlooked something in my assignment. I pull out my laptop during class and correct my errors. In an unusual stroke of luck, I catch a wireless signal in the classroom and quickly check my email during the lecture (this is a no-no... so I maintain a somber and confused appearance, leading others to believe that I'm doing a regression).

10:20AM - Statistics class ends. I rush off to get my seat in Finance class in the big auditorium. On the way I grab a Coke and a bag of Fritos (breakfast of champions). The topic today is the Internal Rate of Return (IRR) vs. Net Present Value (NPV). A lively debate indeed. One that certainly elicits strong emotions in all of us. Apparently NPV is better, but some firms still prefer IRR, so both will be on the exam. Hmph.

11:50AM - Finance class ends. Time for lunch... uh oh. Not yet. I still haven't done my assignment for Leadership class. I sit in the lounge area with my laptop and crank out a "personal vision statement" and a "development plan". I get it done in 20 minutes flat, thanks to some nimble "knowledge re-use" (consulting term)... I picked out some good nuggets from an old business school admissions essay. Why reinvent the wheel?

12:30PM - The Missus and Junior meet me on campus for a (rare) family lunch. The on-campus Au Bon Pain generally has monopoly pricing and post-war-Europe-sized lines, so we wisely stick with our home-packed lunch.

1:30PM - Leadership class. As is customary, we discuss several leadership-related articles. This is a very participative class, always with 10-15 hands in the air. You realize very quickly how much you can learn from your peers. But unfortunately we cover too much material, and the professor moves along right when it gets really interesting. Personally, I'd rather discuss one article in depth than just tease a few insights out of three articles.

2:50PM - Leadership class ends. I chat briefly with my learning team after class to coordinate schedules for the upcoming marketing project.

3:00PM - I run to my Game Theory class to hand in an assignment that's due. Instead of staying in the class, I walk right back out the door and attend the Investment Management club meeting instead. Scheduling conflicts like these aren't too uncommon, especially with an afternoon elective class. This meeting is important, because I'm still trying to figure out whether IM is a viable career option (especially considering I'd be a "career switcher" in a tough market). After the meeting, I decide that stocks are better left as a hobby. I've been surprised at how early you're pressured to choose what you want to do. I'll write another entry about that soon.

4:30PM - I have a minute to check my email. 22 new messages. Man. I read a few, then a 2nd year acquaintance stops by and we chat about career stuff. When 2nd years talk about recruiting and career stuff, it's like sitting at the master's table waiting for a few crumbs to fall. You soak up every word. There are a million interesting things to do with your time at Wharton, but you drop them all for a tip on getting that beloved, shiny, summer internship.

4:35PM - I head over to a Politics Club meeting. Politics is a funny thing. Even though no political viewpoints were expressed (the first meeting was largely administrative), you can just see the expressions on peoples faces when the words "Republican" and "Democrat" are uttered. I can't wait for a debate.

5:10PM - A few of us head over to a "Brand Bash", a consumer goods grab-all-you-can free-for-all. I'm not sure what the object was, but you don't ask questions about free stuff. I walked away with a stick of deodorant, two cans of soup, mint strips, body wash, Motrin, Tylenol, Planters snack mix, and a full box of Lucky Charms. My backpack was literally bursting at its seams. The Wharton experience has already started to pay its dividends.

6:00PM - I head off to the library to study. I need to go through my marketing case. Our learning team has a group project due on Monday and we're meeting tomorrow to discuss. I whip up some revenue, cost, and contribution numbers and jot down a rough outline of the case following the "4 C's" framework: Company, Customers, Collaborators, and Competition. After about 2 hours, I'm tired and hungry so I head home.

8:30PM - I eat dinner and watch Tuesday night's episode of "The O.C." on the TiVo. Tomorrow is Friday which means no class. That means I sleep in a bit later and use the rest of the day to catch up on homework. Whew. I'm exhausted.

posted by Ryan : 9:58 PM | permalink

Wednesday, September 17, 2003


WSJ ranking

Wharton topped WSJ's ranking of business schools as voted by recruiters. Sounds good to me. Whether this helps me land a summer internship or not is another question...

posted by Ryan : 11:38 AM | permalink

Monday, September 15, 2003


TiVo's slow adoption

Being a TiVo lover myself, and knowing that all other TiVo owners love their TiVo's, I've often wondered why the product has had such slow adoption (there are still fewer than a million subscribers). An interesting thought from VentureBlog: the TiVo is really a feature, not a product. The author opines that TiVo should really should be bundled with TV's, Satellite receivers, Cable boxes, etc.

I agree. People aren't getting it. TV watching is a very passive thing. The notion that you can organize your TV like your computer is a foreign concept to most. But in 5-10 years, once the industry figures out how to distribute and bundle this "feature," everyone will wonder how they lived without it. :)

posted by Ryan : 6:40 PM | permalink

Sunday, September 14, 2003


Telemarketers up in arms

The American Teleservices Association is up in arms about Dave Barry's recent article listing the ATA's phone number. Barry encouraged people to call and "tell them what you think... [but] be sure to wipe your mouthpiece afterward." The ATA has apparently stopped answering their phones because so many people have called. Funniest part: Barry's reaction to the ATA's gripe that 2 million telemarketers will lose their jobs as a result of the "do not call list." He quips: "Of course, you could use pretty much the same reasoning to argue that laws against mugging cause unemployment among muggers. But that would be unfair. Muggers rarely intrude into your home."

posted by Ryan : 1:45 PM | permalink

Saturday, September 13, 2003


Overstated corporate profits

93% of S&P 500 companies beat earnings estimates in Q2. Fortune has an interesting article (subscription required) explaining why corporate profits might be overstated. According to Ron Wexler, an economist at Merrill Lynch, 25% of the improvement in profits came from accounting wizardry. Nothing illegal, mind you. It's just that there are no laws governing how quickly a company must depreciate its capital. So instead of depreciating equipment over a 5 year period, they can just depreciate it over 10 years and -- BOOM! -- earnings look higher in the short run.

This is a good example of why most individual investors just throw up their hands and ignore the quarterly earnings reports.

posted by Ryan : 9:26 AM | permalink

Thursday, September 11, 2003


Proud member of the Wharton Email Club

I confidently left the library at 10:30PM with zero unread emails in my mailbox. "I should be fine until the morning," I thought. When I got home 20 minutes later, there were 10 new messages. Earlier in the day I went 3 hours without checking my email and there were 30 unread messages. In 12 years of emailing, I've never seen anything like this.

Elections, clubs, company presentations, industry panels, speakers, class administrivia, etc. etc. etc. The problem is, most of it's not technically spam -- I actually want to read this stuff. But it takes time. Sure, I may only take 2 seconds to decide I can delete the email about the Texas Club, but what about the Wharton West club? How about the Media & Entertainment Club? Or the Consulting Club? Some of these decisions require a purchase commitment (i.e. a nominal $10-40 in club dues) but ALL of them require some sort of time commitment. So the real question becomes, would I rather go to a Consulting Club meeting or to my Thursday afternoon Game Theory class? Should I go to the Industry Panel on Technology or go spend some time with my son? Should I apply for the SBDC consulting position or is 5 hours/wk too much of a commitment?

In any case, they're not kidding when they tell you that there are plenty of opportunities for involvement. I feel like I participate in only 20% of the stuff I'm actually interested in. But you gotta admit, having too many good things going on is a really nice problem to have.

posted by Ryan : 4:07 AM | permalink

Tuesday, September 09, 2003


Market conditions

The PE ratio of the Nasdaq 100 is 77 times trailing earnings right now. That's nuts. Unemployment is high and the figures are likely understating the situation (with an abundance of long-term job seekers not counted). All in all, it seems like a bad time to "invest in the market." Seems like the market has gotten a bit ahead of itself. Normally, I'm all for index funds but it seems like bad timing for that.

That being said, I think the retail industry is getting a bad rap. Good quarters, but mutual funds are dumping retail because they're all betting on an economic expansion, and retail is generally not where you want to be in an economic expansion. For example, Home Depot got nailed today on a good quarter. Costco's also starting to look good. Maybe some bottom-fishing is in order.

posted by Ryan : 9:31 AM | permalink

Monday, September 08, 2003


Bore of the Rings

I think I've reached a point where I won't sit all the way through a movie just because I paid money to see it. The other day I launched into Two Towers, the 2nd in the Lord of the Rings series. I was somehow optimistic about it, despite the fact that The Fellowship of the Ring felt like it was 9 1/2 hours long.

Now, I know this is heresy to those of you who worship Tolkien and consider The Lord of the Rings to be your personal scripture, but wizardry, magic, darkness, special effects, and roast mutton only spell one thing: boredom (actually, I can get into roast mutton but there was precious little of mutton in the movie). I got about 30 minutes through it and had a sinking feeling of dread... and at that moment I did the unthinkable: I just turned it off. Man it felt good. It was like finding $20 in my pocket, recovering two hours of my life that I thought were inevitably gone.

(now if only I could reclaim all those hours spent watching "24" last season.... not 24 full hours as you might think.... with Tivo you fast forward commercials so it was 42 min x 24 episodes = only 16 hrs 48 mins of wasted time).

posted by Ryan : 10:13 PM | permalink

Wednesday, September 03, 2003


The O.C.

Well, we've found our new guilty pleasure TV show. Like many other Fox shows in the past, "The O.C." (i.e. Orange County) features wealthy, amoral, and/or brooding Southern Californians who are 26 in real life but 17 on screen. Why they didn't just call this show "92660" I don't know. But you gotta hand it to Fox for its valiant attempt to further the decline of Western civilization.

posted by Ryan : 1:12 PM | permalink

Monday, September 01, 2003


Waived classes (or the lack thereof) and the retreat

They say Jean Paul Sartre averaged 20 published pages per day for most of his adult life. Somehow I wasn't able to manage a mere paragraph since last Monday. But here's the last week in a nutshell:

posted by Ryan : 9:58 PM | permalink

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